The price of oil in the world market has gone up by 4 percent on Monday following the trade armistice agreed between China and the United States and ahead of the upcoming summit among the member-states and non-member allies of the Organization of the Petroleum Exporting Countries (OPEC) this week in Algeria where one of the main agendas of the gathering will be the proposed supply cutback on crude.
According to Reuters, international Brent crude oil LCo1 futures climbed up by 3.7 percent or $2.18 per barrel, settling at $61.64 a barrel.
US West Texas Intermediate crude futures, on the other hand, were up by 4.1 percent from their last trade at $53 per barrel.
As stipulated by the news agency, both China and the United States had struck an agreement during the sideline meeting of the Group of 20 or G20 in Argentina over the weekend to hold off the implementation of additional trade tariffs on each of the party's respective import goods for at least 90 days. The temporary hold will serve as a window for both economies to come up with resolutions needed to resolve the current trade disputes.
China and United States have recently been embroiled in a trade conflict which was believed to be instigated by the Trump administration when it accused the Asian powerhouse of stealing sensitive US intellectual properties as well as unfairly subsidizing state-owned companies.
The tit-for-tat tariff war has greatly affected the global trade, to which market analysts and experts have been kind of weary that it might spark an economic slowdown on a worldwide scale.
On paper, crude oil and related products were not included in the list of goods intended to be slapped with import tariffs. However, these recent turn of events between the two powerful global economies revived the crude the already declining crude markets.
Futures brokerage experts in Asia said that the trade war ceasefire could enliven oil market activities in the coming weeks. Moreover, the OPEC meeting this coming Dec. 6 in Algiers will also likely to affect how the oil pricing behaves.
It is believed that the cartel, and its non-member ally Russia, will make an announcement regarding its plan to reduce its production output. While there's still no announcements yet regarding how much the producers will cut back, most analysts expect it would be around 1 to 1.5 million barrels per day.
OPEC and its cohorts have long been wary of the continuous decline of crude prices due in part to the inflating volume of supply in the market since October.
